Economics · Banking Financial Awareness

Indian Economy and Policy

1,777 Questions

Indian economy and policy questions cover the structural dynamics and regulatory measures shaping the national market. Topics include foreign direct investment, taxation reforms, and government initiatives for growth. This section is highly relevant for competitive exams requiring economic awareness.

Foreign direct investmentGST impactEconomic reformsTrade policyGovernment economic initiatives

Indian Economy and Policy Questions

Multiple choice

In India, inflation is measured by

  1. wholesale price index number

  2. consumer price index for urban non-manual workers

  3. consumer price index for agricultural workers

  4. national income deflation
Reveal answer Fill a bubble to check yourself
D Correct answer
Multiple choice

Which of the following is NOT TRUE according to the UNCTAD's World Investment Report 2004, released recently?

  1. India ranks 89th on the potential FDI Index.

  2. India tops the list in FDI in offshoring services.

  3. India has 60 export oriented FDI projects, second after US.

  4. All of the above are true.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The UNCTAD World Investment Report 2004 contained various statistics regarding India's FDI performance. Option D is marked as correct because the question asks for what is NOT true, and since all statements A, B, and C were considered accurate at the time of the report, the 'All of the above are true' option is the logical choice for a 'NOT TRUE' question format.

Multiple choice

Which Export Processing Zone has been declared as the first Free Trade Zone in India?

  1. Noida

  2. Kandla

  3. Falta

  4. Santacruz
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Santacruz is been declared as the first Free Trade Zone in India. Santacruz Electronics Export Processing Zone (SEEPZ) is a Special Economic Zone in Mumbai, India. Situated in the Santacruz East area, it is subjected to liberal economic laws as compared to the rest of India to promote rapid economic growth using tax and business incentives and attract foreign investment and technology. Government proposed making SEEPZ a Free Trade Zone (FTZ) in 1999. 

Multiple choice

Why did India export Gold to Bank of England U.K. in 1991?

  1. To meet foreign exchange crisis.

  2. India returned U.K. gold.

  3. For investments in British companies.

  4. India returned gold taken as loan from U.K.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

India export Gold to Bank of England U.K. in 1991 in order to meet foreign exchange crisis. By 1967, India had started having balance of payments problems. By the end of 1990, it was in a serious economic crisis. The government was close to default, its central bank had refused new credit and foreign exchange reserves had reduced to such a point that India could barely finance three weeks' worth of imports. India had to airlift its gold reserves to pledge it with International Monetary Fund (IMF) for a loan. 

Multiple choice

As a part of its commitment to the World Trade Organization (WTO) India has taken various steps to reform its financial sector. Which of the following is one major step in this direction?

  1. Huge budgetary provision for Bharat Nirman Yojana

  2. More and more foreign banks are allowed to open their branches in India

  3. Rebate in rate of personal income tax for Senior Citizen

  4. Introduction of Dividend Distribution Tax (DDT)

  5. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

To align with WTO commitments and global financial standards, India progressively liberalized its banking sector, allowing more foreign banks to establish operations in India to increase competition and efficiency.

Multiple choice

New Economic Policy deals with

  1. privatisation

  2. liberalisation

  3. globalisation

  4. All of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The New Economic Policy (NEP) of 1991 in India introduced major reforms including liberalization, privatization, and globalization to revitalize the economy.

Multiple choice

The Govt. of India put a ban on export of which of the following commodities at the price below the price of the same in domestic market?

  1. Steel

  2. Chemical Fertilizer

  3. Pharma Products

  4. Electronic Goods

  5. None of these
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

The government frequently adjusts export policies for various commodities based on domestic availability and price stability. None of the specific options listed represent a blanket ban on exports at prices below domestic rates in the context of the question.

Multiple choice

What was the main reason for the India's foreign exchange reserve decline in 2007?

  1. Heavy demand of the same by foreign tourists

  2. Import of wheat from Pakistan and South Korea

  3. Appreciation of rupee

  4. Instability in coalition of government in centre

  5. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In 2007, the Indian rupee experienced significant appreciation against the US dollar. This appreciation made exports less competitive and impacted the valuation of foreign exchange reserves.